Weird subsurf edge and circle optimization
If you select what should be the circumference of the circle in “Edit Mode” and press SHIFT + ALT + S and drag your mouse you can achieve your circle shape. Note: The more evenly spaced your vertices are the better the result.



You can clean up the subsurf edge the by adding loop cuts in “Edit Mode” press CTRL + R Left Click and position with your mouse Left Click again to set in place.